Tokyo stocks down 2.75pc by morning break
Rising US yields are making equity markets look less attractive, with some investors switching into fixed-income.
Tokyo stocks tumbled almost three per cent on Thursday morning as jittery investors dumped shares following a sharp fall on Wall Street on the back of concerns over global growth.
The benchmark Nikkei 225 index, which slumped over three per cent at the open, was down 393.54 points, to 13,932.92 by the break, while the Topix index of all first-section shares lost 2.10 per cent, or 24.80 points, to 1,154.07.
The Dow Jones Industrial Average fell 0.69 per cent to 15,302.80 on Wednesday due to concern over the global economy and the recent surges in US bond yields.
The rise in US yields was “taking the wind out of equity markets generally as fixed income investments begin to look more attractive”, said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Hirokazu Kabeya, senior strategist at Daiwa Securities, said “investors still remain shaken-up” after the recent volatile trade in Tokyo, including a single day loss of more than seven per cent last week.
“They don’t see any indication of the downward trend coming to a halt,” he said.
The stock market has soared since Prime Minister Shinzo Abe came to power in December with his pro-spending policies, but sentiment has been turned around, he said, adding investors were now sensitive to any negative news.